Annual report pursuant to Section 13 and 15(d)

Segment Information

Segment Information
12 Months Ended
Sep. 24, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
We are organized on the basis of products and services and have three reportable segments. Our operating segments reflect the way our businesses and management/reporting structure are organized internally and the way our Chief Operating Decision Maker (CODM), who is our CEO, reviews financial information, makes operating decisions and assesses business performance. We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarities and the level of centralized resource planning within our operating segments, such as the nature of products, the level of shared products, technology and other resources, production processes and customer base. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including RFFE, for use in mobile devices; automotive systems for connectivity, digital cockpit and ADAS/AD; and IoT including consumer electronic devices; industrial devices; and edge networking products. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our cloud computing processing initiative (formerly referred to as our cloud AI inference processing initiative).
Our CODM allocates resources to and evaluates the performance of our segments based on revenues and earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to certain corporate assets. Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense, certain net investment income, certain share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development expenses, certain selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories and property, plant and equipment to fair value, amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, asset impairment charges and awards, settlements and/or damages arising from legal or regulatory matters. Our CODM does not evaluate our operating segments using discrete asset information.
The table below presents revenues and EBT for reportable segments (in millions):
2023 2022 2021
QCT $ 30,382  $ 37,677  $ 27,019 
QTL 5,306  6,358  6,320 
QSI 28  31  45 
Reconciling items 104  134  182 
Total $ 35,820  $ 44,200  $ 33,566 
QCT $ 7,924  $ 12,837  $ 7,763 
QTL 3,628  4,628  4,627 
QSI (12) (279) 916 
Reconciling items (4,097) (2,188) (3,032)
Total $ 7,443  $ 14,998  $ 10,274 
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
2023 2022 2021
Nonreportable segments $ 144  $ 134  $ 128 
Unallocated revenues
(40) —  54 
$ 104  $ 134  $ 182 
Unallocated revenues
$ (40) $ —  $ 54 
Unallocated cost of revenues (205) (266) (277)
Unallocated research and development expenses (2,034) (1,767) (1,820)
Unallocated selling, general and administrative expenses (588) (609) (538)
Unallocated other (expense) income (Note 2)
(862) 1,059  — 
Unallocated interest expense (694) (490) (559)
Unallocated investment and other income (expense), net
364  (91) 166 
Nonreportable segments (38) (24) (58)
$ (4,097) $ (2,188) $ (3,032)
The net book value of long-lived tangible assets located outside of the U.S. (the majority of which is located in Taiwan and the rest of the Asia-Pacific region) was $3.6 billion and $3.5 billion at September 24, 2023 and September 25, 2022, respectively. The net book value of long-lived tangible assets located in the U.S. was $2.0 billion and $2.3 billion at September 24, 2023 and September 25, 2022, respectively.
We report revenues from external customers by country based on the location to which our products or services are delivered, which for QCT is generally the country in which our customers manufacture their products, and for licensing revenues, the invoiced addresses of our licensees. As a result, the revenues by country presented herein are not necessarily indicative of either the country in which the devices containing our products and/or intellectual property are ultimately sold to consumers or the country in which the companies that sell the devices are headquartered. For example, China revenues could include revenues related to shipments of integrated circuits for a company that is headquartered in South Korea but that manufactures devices in China, which devices are then sold to consumers in Europe and/or the United States. Revenues by country were as follows (in millions):
2023 2022 2021
China (including Hong Kong) $ 22,382  $ 28,119  $ 22,512 
Vietnam 4,551  6,063  3,114 
South Korea 3,272  3,164  2,368 
United States 1,259  1,482  1,406 
Other foreign 4,356  5,372  4,166 
$ 35,820  $ 44,200  $ 33,566